"Assets" in bankruptcy are quite simply your property. The common conception of property is of clothes, household goods, electronics, savings, cars, and homes. However, bankruptcy takes a broad definition of property, so it also includes things you may not immediately think of as property, such as retirement accounts, intellectual property, fractional interests in real estate, burial plots, joint bank accounts, pensions, insurance claims, and lawsuit proceeds.
So, with the definition of assets being broad and wide-ranging, what are the most important to consider when filing a bankruptcy?
If you own a home, it is without a doubt your most important asset, and under the Bankruptcy Code, you will not lose it as long as you can afford to pay for it. A mortgage is a secured debt, and under bankruptcy law it must be paid in full, at the contract rate (in most cases). In addition, home equity loans and property taxes must also be paid in full. But, as long as you can afford to make these payments, you can keep the home. The bankruptcy "exemptions" allow for equity in the home (as long as it is your primary residence) to be protected, up to $23,675.00 for each filer. So, losing your home in bankruptcy should not be a concern.
The second most important asset for most filers is their car. Once again, a car loan is a secured debt that must be paid in full. As long as you can afford it, you can keep your car. Another exemption protects your equity, thus losing this important asset should also not be a concern. Multiple car ownership may present some problems with exemptions, so it is important to discuss this situation with your bankruptcy attorney.
As mentioned above, bankruptcy has a broad definition of "assets", and this also includes pensions and retirement accounts. These are hugely important assets, and fortunately they are entirely protected under bankruptcy, assuming they are non-alienable (that is, you cannot freely take money from the account, such as you can in a savings or checking account). Almost all retirement accounts, including government pensions, 401(k)s, and 403(b)s are completely safe. Bankruptcy need not threaten your financial future.
A final important "asset" is often not thought of as an asset at all... that is joint ownership in any property you do not primarily use. An example might be a car you jointly own with one of your children that is entirely used and maintained by the child. This isn't your property in the common idea of ownership and usage. However, for bankruptcy purposes, you own a 1/2 interest that must be exempted. You will be considered as having a partial interest in any property of this type.
Listing all of your assets is an important step in any bankruptcy, therefore is important to discuss and closely review it with your attorney. There is no need to lose any of your property, but failure to disclose it could lead to your case being dismissed, or even perjury charges being brought. Contact us to speak with an experienced Pittsburgh bankruptcy attorney to set up a free consultation where we can review your assets and come up with a plan to protect them.